On average, Steel Warehouse maintains a steel inventory of up to a third more than competitive steel providers, with approximately 350,000 tons daily in the US and 30,000 tons daily in Mexico.
That means our customers have access to the right steel when and where they need it. Not only that, but they also gain advantages from improved pricing to flexibility, time savings and more.
Predictable Pricing and Product Availability: Providing customers with the best pricing for their steel and ensuring they have a consistent supply of materials depends on forecasting. Approximately 80 to 85% of Steel Warehouse customers represent contract business and provide our sales team with a forecast of their steel needs. The forecast can range from three months to a year in advance. This allows us to purchase steel ahead of time and secure pricing based on Commodities Research Unit (CRU) — an international pricing index that provides insight into the average cost per ton steel is being sold for. We also consult the American Metal Market and Futures Market to build pricing, which we typically hold quarterly for customers. This business model is predictable for customers’ budgets and always keeps steel in their facilities.
In addition to purchasing steel based off customers’ forecast, we also buy extra to keep in inventory. If a contractual customer has an uptick in business, we can still ensure they receive steel in a timely manner. Extra inventory also supports spot buys for the remaining 15 to 20% of our customer base.
Flexibility and ongoing communication are key to the partnership between Steel Warehouse and our customers. We speak regularly to customers to understand if their steel needs have changed — increasing or decreasing — and can make the necessary adjustments to their steel program.
Inventory is delivered in sync with your production needs, improving efficiency and reducing space requirements for on-site storage. That frees up valuable floor space—so instead of stacking raw material, you can use that area to increase productivity, add new equipment, or streamline your production floor layout.
Just-in-Time (JIT) Delivery: Because of our inventory management, Steel Warehouse can offer JIT delivery to customers. The average lead time from a mill is approximately four to six weeks. Based on customer forecasts, we can account for those lead times to ensure that we have the right materials in-house and ready to deliver. That could mean having material on the floor to deliver in as little as two days based on an immediate need or to schedule out deliveries further based on communication with the customer and any updates to their forecasts. Some customers may want regular deliveries on specific dates, while other prefer to call when they are ready for more materials. Steel Warehouse is flexible to those needs.
Cost and Time Savings: Mills produce thousands of pounds of steel at a time, making it unrealistic for customers to purchase directly from them. Steel Warehouse has the capacity to buy in large quantities, which costs less, and we can pass that savings to customers. They only pay for the steel they need at the time it is delivered, as opposed to putting forth significant cash outlays.
Our ability to process steel onsite and keep it in storage adds to the advantages of inventory management for our customers. Customers save on the cost of manpower and the capital investment for equipment to process the steel, along with the maintenance and repair of that equipment.
Holding inventory for customers also saves them time. They can focus on value-added processes, like welding and fabricating, instead of ordering material, bringing it to their facilities, managing storage areas and finishing the steel.
Along with these advantages to our inventory management, Steel Warehouse is proud to be a trusted partner for our customers. We have long-term relationships with the steel mills, allowing us to be advocates for our customers and their business. They can count on Steel Warehouse for our in-depth experience, expertise and advice.
For questions, contact a steel expert.